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Grimsby Telegraph: Drax results 'vindicate biomass conversion strategy'


POWER giant Drax’s results for 2013 “vindicate the biomass conversion strategy” that has brought £75-million of investment to Port of Immingham.

Today's published results showed earnings were down from £298-million to £230-million for the year, purely because of the increased cost of carbon due to environmental policy changes in the UK and Europe.

Peter Emery, production director at Drax, said: “Broadly thinking, our results are quite interesting. We are pleased with our earnings, but they are 23 per cent down on 2012, and that’s because of the increased cost of carbon.

“The plant has performed well and this vindicates our biomasss conversion strategy

Share price has gone up, while the profit has gone down. It is all about recognising where the future is. We have proved the technology, it can work.”

The regional power station, the second largest in Europe, provides eight per cent of the nation’s electricity.

Immingham Renewable Fuels Terminal is to be completed later this year, boosting the feed stock supply as a second unit is prepared for biomass burning.

Mr Emery said: “A highlight for us was the conversion of the first unit in April, and that has run very well. We projected the design to run at 585MW but we can get 630MW out of it. With additional investment we have improved performance.

“We are going to modify a second unit, not a complete conversion, but an enhanced co-fire to 80 per cent biomass. With the converted unit and a modified unit we will run at a third biomass in total.”

Looking at the ports, Mr Emery said: “We did a small project with ABP in Hull for one million tonnes, and that started up in December. For Immingham, we signed a contract early last year to import up to a capacity of three million tonnes, and that project goes live in the third quarter of this year. That capacity will help support the converted units.

“I have been on a brief visit, and will be going down again later this year. We’ve not only had some major engineering challenges on site to put in the logistics supply chain, but also the work with all the ports.”

At the beginning of the chain Immingham sits in the midst of, construction of two 450,000-tonne wood pellet plants – Amite, Mississippi and Morehouse, Louisiana – and a port facility at Baton Rouge, progressed well during the year.

“All three construction projects are progressing to schedule and budget,” said Drax chief executive Dorothy Thompson, giving an overview of the US work. “We are targeting the first quarter of 2015 for the start of commercial operations at Amite and Baton Rouge and the second quarter for Morehouse, with full capacity reached six months later.”

Looking at the UK logistics, she said: “Initial long-term contracts have been secured with UK port operators to provide us with biomass import facilities. Further contracts are under negotiation. The development of these facilities is on schedule.

“We have concluded our first long-term freight contracts at fixed prices. We were particularly pleased to be able to secure through these contracts good protection against future increases in oil-related freight costs, typically a major component of total freight costs. The first 50 of the bespoke biomass rail wagons are operational transporting biomass from the ports to the power station.”

Two-trips a day are taking place between Hull and Drax. “Immingham will have three times the capacity, that’s a lot of movement between Drax and Immingham,” Mr Emery added.